Brent crude prices dip on rising supply, global market woes

Wayne Curry |Friday, November 02, 2018

Iran oil sales still strong ahead of sanctions

While ongoing trade tensions between the world's two largest economies stoke concerns over global energy demand, traders continue to watch how much Iranian supply will be taken out of the market when USA sanctions hit early next month.

Prices were pressured as US inventories were expected to rise for a sixth straight week as other top producers Saudi Arabia and Russian Federation signalled potential output increases.

"The sanctions, more than harming us, would be hurtful to the U.S.; Trump policies have raised the global oil prices which would not be to our loss, and we have been able to find new customers for our oil", Gholamali Jafarzadeh, a member of Iranian parliament, told the Iranian oil ministry's news service Shana on Sunday.

The three countries, as reported by media, already argued that there were not sufficient supplies worldwide to replace Iranian oil volumes.

Front-month Brent crude oil futures were at $77.15 a barrel at 0644 GMT, down 19 cents, or 0.3 percent, from their last close.

NIOC offered a million barrels of crude oil on IRENEX on Sunday, of which 280,000 barrels were traded.

"Saudi Arabia's production has reached 10.7 million barrels per day this month and we could increase production to 12 million barrels per day".

The International Energy Agency (IEA) on Tuesday said high oil prices were hurting consumers and could dent fuel demand at a time of slowing global economic activity.

The sanctions have triggered a black-market fueled by Iranian tankers - or "ghost ships" - that dismantle their vessel tracking systems, according to regional observers, making it extremely hard to estimate how much Iranian oil is on the market at any given moment.

The second round of US sanctions reimposed by president Donald Trump in May kick in on November 4.

The pressures pushed oil prices to a four-year high at the start of October with Brent crude oil selling for more than $86 per barrel.

Around 300,000 bpd of crude oil previously pumped and exported in the Kirkuk province to the Turkish port of Ceyhan have been shut in since the Iraqi federal government moved in October previous year to take control over the oil fields in Kirkuk from Kurdish forces.

There are also signs of a slowdown in global trade, with container and bulk freight rates dropping after rising for most of 2018, according to reports. -China trade war are stirring demand-growth concerns. The U.S. has been pulling diplomatic and economic strings to convince Iran's clients to stop importing buying its oil.

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